Fanatics Launches Sports Prediction Platform, Circumventing State Sports Betting Taxes
WASHINGTON – Fanatics has entered the sports wagering arena with the launch of its “Fanatics Predicts” platform, now available in 24 states where traditional sports betting remains illegal. Unlike conventional sportsbooks, the platform operates as a prediction market, placing it under federal regulation and exempting it from state taxes on wagers and revenue.
The move comes as national sportsbooks like FanDuel and DraftKings prepare to enter similar prediction markets – known as sports event contracts – in 2026. These markets allow users to wager against each other on the outcomes of sporting events, elections, and other occurrences.
Currently, Fanatics Predicts is live in states including California, Texas, Georgia, Washington, Florida, and Alaska, offering wagers on sports, finance, economics, and politics. The company plans to expand offerings in early 2026 to include crypto, stocks/IPOs, climate, pop culture, tech/AI, movies, and music.
“For years, Fanatics has given fans new ways to enhance their fandom through team merchandise, collectibles, tickets, gaming, events and more,” said Matt King, Chief Executive Officer, Fanatics Betting and Gaming. “Now, with Fanatics Markets, we’re giving fans a safe, and intuitive way to engage with the moments that move sports and culture, and to pick a side and profit along the way if their prediction is correct.”
The rise of prediction markets hasn’t been without controversy. Kalshi, a similar platform, has faced lawsuits and cease-and-desist letters from state sports wagering oversight boards alleging unlicensed sports betting. A class action lawsuit was filed against Kalshi the week of thanksgiving, claiming a lack of transparency regarding who users were wagering against.
The emergence of these federally regulated platforms is prompting concern among state lawmakers. Wisconsin Representative Tyler August recently cautioned colleagues that prediction markets could dominate state wagering if Wisconsin doesn’t swiftly legalize sports betting through its 11 tribes.
“If we leave a gray area in state law, national prediction platforms will fill it without our compact framework, wisconsin oversight, or Wisconsin consumer safeguards,” August wrote.
Prediction markets are regulated by the Commodity Futures Trading Commission, a key distinction from traditional sports betting which falls under state jurisdiction and is subject to state taxes.
